TMI Blog2020 (9) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioner which is in compliance of provisions of section 9 of the Insolvency and Bankruptcy Code admits this Petition declaring moratorium - Petition admitted. - C. P. (IB) No. 3169/NCLT/MB/2019 - - - Dated:- 11-8-2020 - Hon ble Member ( Judicial ) , Smt. Suchitra Kanuparthi And Hon ble Member ( Technical ) , Shri V. Nallasenapathy For the Petitioner : Adv. Kartiki Galdi For the Respondent : Mr. Ishan J. Ravindranathi/b Mr. Siddhesh ORDER Per : V. Nallasenapathy, Member (Technical) 1. This Petition is filed by Spartan Engineering Industries Pvt. Ltd. ( Petitioner ) against Sivana Realty Pvt. Ltd. ( Corporate Debtor ) for initiating Corporate Insolvency Resolution Process ( CIRP ) as provided under section 9 of the Insolvency Bankruptcy Code, 2016 ( Code ) read with rule 6 of Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rules, 2016 ( Rules ) alleging that the Corporate debtor defaulted in making payment to the extent of ₹ 17,80,470/-. 2. The petition reveals that the petitioner is in the business of engineering services and supplied engineering goods to the Corporate Debtor on the basis of four purchase ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ighted by the Corporate Debtor: The parties shall indemnify, defend and hold harmless the other Parties from and against any and all losses, cost, expenses, damages, claims, liabilities which may arise out of or as a result of breach of any representation and warranty by the Parties contained in these presents. (Clause 9.1) ` The Sunshine Group do and each of them doth hereby further indemnifies the Vira Group and its successor and hold them harmless from and against any loss, claim, tax, damage, liability or expense suffered or incurred by Vira Group in connection with or arising from: a. Any material litigations pending against, by or affecting the business of the Sunshine Group or its assets/properties, wherein Vira Group had a stake therein; b. Any material claims relating to the affairs, business and properties of the Sunshine Group. (Clause 9.2) It is agreed between the Parties [viz THE Sunshine Group and the Vira Group] hereto that the Vira Group shall not be responsible or held liable for any of the liabilities including secured and unsecured borrowings, inter corporate deposits, loans from shareholders, debenture holders, loans from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e returned to the petitioner. g. This prevailing situation does not warrant any adverse order against the new management of the Corporate Debtor (i.e. Vira Group)under the Code. The interest claimed at the rate of 24% is usurious in nature and the entire claim of the petitioner has to be set aside as provided under Section 3 4 of the Usurious Loans Act, 1918. Without prejudice to the contentions raised, the Corporate debtor is willing to handover all the goods supplied by the petitioner to the Corporate Debtor for settling this dispute. h. The erstwhile management of the Corporate Debtor (Sunshine Group) has not handed over any of the documents pertaining to these transactions. The new management of the Corporate Debtor (Vira Group) shall not be made to bear the brunt of the action of the erstwhile management of the Corporate Debtor (Sunshine Group). Without prejudice to the above contentions, it is submitted that the interest charged by the petitioner at the rate of 24% p.a. on the defaulted amount is usurious in nature and hence the entire amount claimed by the petitioner has to be set aside relying on the provisions of Section 3 4 of the Usurious Loans Act, 1918 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total advantage which may reasonably be taken to have been expected from the transaction. (c) In considering the question of risk, the Court shall take into account the presence or absence of security and the value thereof, the financial condition of the debtor and the result of any previous transactions of the debtor, by way of loan, so far as the same were known, or must be taken to have been known, to the creditor. (d) In considering whether a transaction was substantially un- fair, the Court shall take into account all circumstances materially affecting the relations of the parties at the time of the loan or tending to show that the transaction was unfair, including the necessities or supposed necessities of the debtor at the time- of the loan so far as the same were known, or must be taken to have been known, to the creditor. Explanation.- Interest may of itself be sufficient evidence that the transaction was Substantially unfair. (3) This section shall apply to any suit, whatever its form may be, if such suit is substantially one for the recovery of a loan or for the enforcement of any agreement or security in respect of a loan 1 or for the redemption of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reason to believe that the rate of interest levied is excessive. h. Penumesta China Venkatraju v. Pulavarthi Lakshmanaswami Anr ( Venkatraju s Case) (AIR 1931 Mad 729) wherein Hon ble Madras High Court has held that Insolvency Courts have the requisite jurisdiction to adjudicate upon the rate of interest levied by a creditor upon the debtor, whether the same is excessive or not in terms of Usurious Loans Act, 1918. 6. The Corporate Debtor further submits that the Judgment of the Hon ble NCLAT dated 29/11/2018 in the case of Naveen Luthra v. Bell Finvest (I) Ltd Anr), wherein it was held that the Usurious Loans Act, 1918 is not applicable for initiation of Corporate Insolvency Resolution Process ( CIRP ), is no longer a good law in view of the Order of the Hon ble Supreme Court dated 25/11/2019 in Naveen Luthra v. Bell Finvest (I) Ltd Anr) (Civil appeal No. 654/2019) wherein it was ordered as below: Heard learned counsel for the appellant and perused the relevant material. We are not inclined to interfere with the order impugned in the appeal. The same is, accordingly, dismissed. However, it will be open for the appellant to press the issue of rate of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate Debtor. (b) That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. (c) That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (d) That the order of moratorium shall have effect from this day till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, as the case may be. (e) That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of the Code. (f) That this Bench hereby appoints Mr. Neehal Mahamulal Pathan, having office at RS No. 825, Plot No. 27, Sahjeevan Parisar, Karande Mala, near TPM Church behind Circuit House Kolhapur, Kolhapur, Maharashtra -416 003; having email address: ca.neehal@gmail.com; having Registration No. IBBI/IPA-001/IP-P-01561/2018-2019/12406 as Interim Resolution Profess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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